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Pension plans debate
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<blockquote data-quote="brett636" data-source="post: 792072" data-attributes="member: 249"><p>One of the problems with pensions is that they have a growing number of people collecting them and fewer number of people paying into them. As the ratio gets tighter market dips cause fund assets to plummet with a longer road to recovery once the market does recover. For example I am covered under local 710s pension fund, and we had some representatives of the fund come down to explain how the fund was operating and what benefits we were entitled too once we retire. I left that meeting with an uneasy feeling about the pension fund I am supposed to draw upon mainly because the pension pays out more in benefits every year then in takes in from contributions. Its growth is largely staked on market gains, and as more people begin retiring under this plan I wouldn't be surprised if those normal market gains would be enough to sustain the plan. Its the same issue with Social Security where we have fewer people paying in right as baby boomers start to retire straining the system to insolvency. </p><p></p><p>The main benefit to a personal retirement savings is you are the only one who can draw from it so if you start early enough and save long enough you can have a hefty sum to retire with. Those savings can provide a good retirement income as well as something to leave to your heirs once you pass on. With a pension once you die your benefits end unless you have a surviving spouse who gets surviving spouse benefits. Nothing will go to your kids. Same with Social Security as once you are gone the benefits end regardless if you were able to reclaim all the money you put into the system. </p><p></p><p>I realize that not everyone can put a sufficient amount of money away for retirement, although my guess is this is largely due to lifestyle choices like having car payments as well as revolving credit card debt. Perhaps better education on the importance of saving for retirement is necessary, but in a world where the here and now matter more than future living requirements I have little faith it will do much good. </p><p></p><p>Personally I would rather withdraw from the pension fund if I had the option to get the contributions put into a retirement account that only I can draw from. That way I can retire comfortably without the fear that benefits I am supposed to get later will be used up by those retiring today.</p></blockquote><p></p>
[QUOTE="brett636, post: 792072, member: 249"] One of the problems with pensions is that they have a growing number of people collecting them and fewer number of people paying into them. As the ratio gets tighter market dips cause fund assets to plummet with a longer road to recovery once the market does recover. For example I am covered under local 710s pension fund, and we had some representatives of the fund come down to explain how the fund was operating and what benefits we were entitled too once we retire. I left that meeting with an uneasy feeling about the pension fund I am supposed to draw upon mainly because the pension pays out more in benefits every year then in takes in from contributions. Its growth is largely staked on market gains, and as more people begin retiring under this plan I wouldn't be surprised if those normal market gains would be enough to sustain the plan. Its the same issue with Social Security where we have fewer people paying in right as baby boomers start to retire straining the system to insolvency. The main benefit to a personal retirement savings is you are the only one who can draw from it so if you start early enough and save long enough you can have a hefty sum to retire with. Those savings can provide a good retirement income as well as something to leave to your heirs once you pass on. With a pension once you die your benefits end unless you have a surviving spouse who gets surviving spouse benefits. Nothing will go to your kids. Same with Social Security as once you are gone the benefits end regardless if you were able to reclaim all the money you put into the system. I realize that not everyone can put a sufficient amount of money away for retirement, although my guess is this is largely due to lifestyle choices like having car payments as well as revolving credit card debt. Perhaps better education on the importance of saving for retirement is necessary, but in a world where the here and now matter more than future living requirements I have little faith it will do much good. Personally I would rather withdraw from the pension fund if I had the option to get the contributions put into a retirement account that only I can draw from. That way I can retire comfortably without the fear that benefits I am supposed to get later will be used up by those retiring today. [/QUOTE]
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